How Recession-Proof Is Texas?

While most of the 50 states remain mired in economic
stagnation, numerous journalists, think-tankers and economic indicators
are bullish on the seemingly bullet-proof Texas economy. Local officials
have taken pains to present their cities as business friendly, and the influx of new residents has
bolstered some areas at a time when Americans are leaving expensive
Florida or California locales. Has the case for the Lone Star state been
exaggerated, or do they truly have "something special" going on?
Pundits weigh in:

Texas Is Rising While California Slumps
observes CNN/Fortune's Kit R. Roane, in an article that appears to have
kick-started the recent Texan prognoses. The state has an ideal
combination of low taxes, friendly business districts, diversity of jobs
and lax regulations that California (called the "the Venezuela of North America" by Chief Executive)
lacks. The writer ventures: "Texas powered through the global fiscal
crisis, while The Golden State's economy is forecast to remain tarnished
for some time."

No State Is Thriving Like Texas reports
The Atlantic's Derek Thompson, who outlines four reasons why the state
is "dominating" the economic doldrums. 1) Texas was seeing a quiet
energy boom as the recession began in 2008, so it's a late comer to the
recession. 2) The state's real-estate prices have largely remained stable. 3) Texas's big cities have a diverse mix of industries that power the local
economy. 4) It's got that special something: "Maybe it's the lack of a
state income or capital gains tax. Or the dearth of union workers."

The Lone Star Is Unmatched in General Resiliencywrites
Ryan Avent at The Economist, who agreed with many factors that Thompson
listed with some caveats: "Take a tech-oriented region like Greater
Boston or the Bay Area, subtract out a housing collapse and add in an
energy boom, and I suspect you've covered most of the discrepancy in
performance. Concerning the 'Something About Texas' factor, I'd also
note that success has probably been self-reinforcing. A stable, cheap
housing market and a relatively robust job market has likely acted as a
magnet for migrants from other areas—especially the Midwest and South."

The 'Miracle' Is Semi-Mythical blogs
Matthew Yglesias at ThinkProgress, who expands on Ryan Avent's post
and Thompson's article: "I’d go stronger than this. If instead of
comparing states you compare metropolitan areas, you sort of wonder
where this miracle is. Here’s unemployment by metropolitan area.
How’s Greater Boston doing? Well, they’re at 8.2 percent and faring
better than Texas’ large Dallas and Houston metro areas...States, for
better or for worse, aren’t real economic units. So state-level
statistics often represent somewhat meaningless aggregation effects."

Texas Has Avoided the Recession, So Farexplains
Professor Wendell Cox at New Geography. Although Texas has avoided the
fate of its "primary competitors" California and Florida, there still
are threats looming that may bog down the state's economic fortunes.
"Yet, despite the success of the less restrictive land use policies in
Texas, there are strong efforts there to impose more smart growth
policies. The impact could be devastating, especially from strategies
that ration land that would raise land and house prices, as has occurred
in California and Florida...Federal initiatives, under proposed climate
change and transportation acts could do much to destroy not only the
affordability of Texas metropolitan markets, but could also make Texas
less competitive in the decades ahead."

This article is from the archive of our partner The Wire.

We want to hear what you think about this article. Submit a letter to the editor or write to letters@theatlantic.com.